We investigated Brazil's ethanol sector and uncovered slavery

Pedro shows off the machete he uses to cut down sugarcane in Atalaia, Brazil, September 26, 2021

Pedro shows off the machete he uses to cut down sugarcane in Atalaia, Brazil, September 26, 2021. Thomson Reuters Foundation/Ailton Cruz

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Ethanol companies in Brazil's main decarbonization scheme have been fined for slave labor in blow to its sustainability claims

RIO DE JANIERO - When manual laborer Alison Moreira dos Santos moved across Brazil for a job on a sugarcane plantation in the southeastern state of Minas Gerais in March, he expected to work hard.

Just over a month later, the 35-year-old was dead.

Dos Santos had worked for a landowner supplying sugarcane to Usina Coruripe, a company that produces ethanol, a biofuel.

Following a tip-off, labor inspectors raided the plantation in late April. Dos Santos was part of a group of 10 workers who were ultimately adjudged by the officials to have been trafficked and subjected to "slavery-like" conditions.

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Among the abuses identified by the authorities, the laborers lived in a garage. They lacked access to a bathroom while they worked and were not given protective gear, as mandated by law.

In the case of dos Santos, he had worn an ill-fitting pair of boots he found, causing a wound on his right ankle that became infected, according to labor inspectors and his family.

Dos Santos was not at the plantation when the raid took place, because days earlier, he had returned home to the northeastern state of Maranhão, where he died of sepsis as a result of the infection on his ankle, his wife said.

Anti-slavery and green advocates said the case highlights shortcomings with a government sustainable biofuel program - of which Coruripe is a member - and a rise in unscrupulous subcontractors trafficking people to work in the ethanol sector.   

Labor inspectors determined that Coruripe was ultimately responsible for the abuse of the 10 workers as their true employer - due to its business arrangement with the plantation's landowner - and fined the company for engaging in slave labor.

In response to the raid, Coruripe in August signed a separate deal with labor prosecutors, under which it agreed not to "directly or indirectly" use slave labor, and committed to carry out regular checks on its suppliers.

Coruripe told Context that it has since cut ties with the landowner in question, and has created an inspection task-force to check on conditions at the plantations it sources from.

The company also said it had been "wrongly" sanctioned by labor inspectors and that it was not responsible for the workers. It told Context that it is appealing the fine.

Labor inspector Humberto Camasmie, who led the operation in April, maintained that Coruripe was liable for the abuses.

"(Coruripe) is responsible for everything," he told Context, referring to the case involving the 10 workers.

Dos Santos' wife, Leidivania Fonseca, who is suing Coruripe for damages over his death, believes her husband would still be alive if labor conditions at the plantation had been decent.

She said she had asked him to leave the plantation so he could get care. "But there was not time - it was all very fast. I never imagined he could die from a foot injury," she added.

Coruripe said it had "no further information on this worker, since he was hired by our former supplier".

Scrutiny over sustainability

Government-led raids seeking to crack down on labor abuses in the supply chains of ethanol companies have rescued at least 352 workers on sugarcane plantations to-date this year.

The sugarcane industry has long been a top target for labor inspectors who say that slave labor is endemic. Since 1995, authorities have rescued more than 8,000 workers in the sector.

Ethanol is a biofuel made from sugarcane, corn and other crops that can be mixed with gasoline to reduce carbon emissions from vehicles that would otherwise run solely on fossil fuels.

It is used in a government program - the Brazilian National Biofuels Policy (RenovaBio) - to decarbonize the country's fuel supply chain with greener options.

Since 2016, seven firms in the program have been fined for slave labor, with three of them - including Coruripe - penalized this year, show labor inspectorate reports obtained by Context.

Machinery collects sugarcane harvested by workers in a plantation near Maceio, Brazil, on September 27, 2021

Machinery collects sugarcane harvested by workers in a plantation near Maceio, Brazil, on September 27, 2021. Thomson Reuters Foundation/Ailton Cruz

Machinery collects sugarcane harvested by workers in a plantation near Maceio, Brazil, on September 27, 2021. Thomson Reuters Foundation/Ailton Cruz

Coruripe also has a certification from Bonsucro, an international non-profit that promotes sustainable sugarcane production, but which Brazil's labor prosecutors have criticized for not stopping abuses on plantations the group has certified.

Bonsucro told Context that some of the plantations that Coruripe sources sugarcane from are certified, but not the one where dos Santos had worked and which was raided in April.

Bonsucro said it had signed a deal in 2021 with Brazil's Labor Prosecutor's Office to revise its production and certification standards, which requires firms to have a robust human rights risk assessment and management plan for their entire operations.

Several experts said the latest events call into question the ethanol sector's sustainability and labor standards.

They come a year after a 2021 investigation by Context revealed that some ethanol firms authorized by the United States for export, and others certified by Bonsucro, had been found by authorities to have engaged in slave labor and other abuses.

"(RenovaBio) has no checks and balances. It is financing slave labor," said Marques Casara, executive director at Papel Social, a social enterprise that monitors supply chains.

In Brazil, slavery is defined as forced labor, but also covers debt bondage, degrading work conditions, long hours that pose a risk to health and any work that violates human dignity.      

Flawed system

Ethanol is seen by some green experts as a key component of the global push to transition from a carbon-based economy to a cleaner, more climate-friendly business model.

Brazil has incentivized ethanol since the 1970s, with the world's second largest producer having recently supported the industry through RenovaBio, which was signed into law in 2017.

The legislation anchoring the program lists "environmental preservation and the promotion of economic and social development and inclusion" among its core principles.

It created a system where biofuel companies earn "credits", called CBIOs, that fossil-fuel distributors must buy to meet emissions reduction standards set by the government.

Each CBIO accounts for one tonne of avoided CO2 emissions. They are issued to companies in accordance with evidence of the emissions their product saves compared with fossil fuels.

CBIOs are traded on the Brazilian stock exchange, where they are bought by fossil-fuel distributors.

The government does not publish data from individual firms, but overall sales of CBIO credits generated an estimated R$1.5 billion ($290 million) in revenue for biofuel companies in the first six months of 2022, up from R$1 billion for all of 2021, official data shows.

RenovaBio - which covers more than 300 biofuel companies - is touted by the industry as a sustainable program that will help Brazil decarbonize its fuel supply chain.

But while the system rewards companies for making low-emission fuel, it lacks checks on the environmental and labor standards applied to how ethanol is produced, said Ricardo Fujii, coordinator for conservation at green group WWF-Brazil.

"(The ethanol industry says) it's sustainable. It's not. We are a long way away from that," he said, adding that the program needs to be improved.    

Slavery on the rise

In response to Context's findings, Brazil's mining and energy ministry, which is responsible for RenovaBio, said it "is not intended to assess social or labor issues".

Lucilene Binsfeld, president of the deliberative council of InPacto, a leading anti-slavery nonprofit, called for the government to suspend the firms accused of slave labor from RenovaBio until they present a plan to address the issue.

"(To the government) it's only important to show the world that they have a program to reduce greenhouse gas emissions," she said.

In 2017, the same year that RenovaBio was signed into law, Brazil's Congress also passed a bill that made it legal for companies to subcontract labor for their core businesses.

This led to a rise in the number of slavery cases identified at sugarcane plantations as ethanol firms started subcontracting workers, said Maurício Krepsky, head of DETRAE, the Brazilian government's anti-slavery department.

But such subcontracting is often illegal, with plantation owners and recruiters serving as middlemen or a front for ethanol companies who are the workers' ultimate employers and bear responsibility for their rights, Krepsky added.

In the Coruripe case, labor inspectors in their report said the company was the true employer of the workers as it had an exclusivity agreement with the landowner that was designed to avoid the cost and risks of hiring the laborers directly - a finding refuted by Coruripe.

In a different case in January, labor inspectors rescued about 270 workers from a plantation supplying sugarcane to WD Agroindustrial, an ethanol firm on the RenovaBio program - the biggest such rescue operation in more than a decade.

While the workers were subcontracted, inspectors ruled that WD Agroindustrial was their real employer - not the plantation.

The authorities found that the workers were living in degrading conditions in lodgings provided by the subcontractors.

Sugarcane is harvested by workers in a plantation near Maceio, Brazil, on September 27, 2021

Sugarcane is harvested by workers in a plantation near Maceio, Brazil, on September 27, 2021. Thomson Reuters Foundation/Ailton Cruz

Sugarcane is harvested by workers in a plantation near Maceio, Brazil, on September 27, 2021. Thomson Reuters Foundation/Ailton Cruz

Some worked without rest for over a week without a day's rest, and others were paid below Brazil's minimum wage.

In a statement, WD said it disagreed with the assessment of labor inspectors, adding that the workers rescued had been employed by a subcontractor with which WD has since cut ties. The company is appealing a fine against it.

WD also said that since the raid, it had hired companies to improve its internal controls and to implement a monitoring program for both its own employees and subcontracted workers.

Social certification?

In at least one case identified by Context, an ethanol company has remained in the RenovaBio program despite being sanctioned for labor abuses more than once.

Delta Sucroenergia, which was fined in 2021 after labor inspectors found 45 subcontracted workers in slavery-like conditions, was penalised for slave labor again this year.

Delta said last October that it had dropped the subcontractors involved, provided assistance to the rescued workers, and revised its guidelines for service providers.

This April, authorities found 34 workers in slavery-like conditions in Minas Gerais on a different sugarcane plantation. Delta was again identified as their real employer and fined.

Authorities identified several labor violations, with workers lacking drinkable water, bathrooms and safety equipment in the field - all of which are required under Brazilian law.

Delta told Context that since last year it has strengthened its due diligence regarding subcontractors.

"Delta, in addition to increasing the inspection of its service providers, started an awareness campaign among its suppliers," it said in a statement, adding that it hired a firm to write a manual on good socio-environmental practices.         

Last May, Instituto Escolhas, a think-tank that researches sustainable development, proposed the creation of a RenovaBio social certification to grant to audited biofuel companies that prove they respect labor and environmental laws.

Initially the benefits would be reputational but could pave the way for a social credit linked to RenovaBio, said Juliana Siqueira-Gay, a project manager at Escolhas. 

The idea has not progressed since it was presented to the RenovaBio committee in May.

The certification proposed by Escolhas would demand "a major change in the entire program", including to the law that set up RenovaBio, the energy ministry said in a statement.

For dos Santos' family, however, any such reforms would come too late. As a widow, Fonseca must now look for a job, so that she can feed her two children, aged 10 and four.

"I want them to study, to go to college," she said. "I think only of them."

(Editing by Kieran Guilbert and Megan Rowling)

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